The U.S. Supreme Court recently granted certiorari in class action cases involving: (1) class action waivers in employment contracts; and (2) whether filing of a securities class action tolled a statute of repose. In both cases the questions presented are relatively narrow, but opinions issued by the Supreme Court potentially could have broader implications for the law on class action waivers and class action tolling.
Epic Sys. Corp. v. Lewis, Ernst & Young LLP v. Morris, and NLRB v. Murphy Oil USA, Inc., Nos. 16-285, 16-300, and 16-307 (SCOTUSblog page) involve whether an agreement to arbitrate employment-related disputes, which requires individual arbitration, and provides for a waiver of class action and collective action claims, is enforceable under the Federal Arbitration Act notwithstanding the provisions of the National Labor Relations Act. This issue is the subject of a circuit split, with the Second, Fifth and Eighth Circuits enforcing such arbitration agreements, and the Seventh and Ninth Circuits (and the NLRB) finding the agreements unenforceable. The issue appears to focus mainly on whether the National Labor Relations Act provides a “contrary congressional command” and thus falls within a savings clause in the Federal Arbitration Act. This case will obviously be important to employers utilizing or considering the use of such arbitration provisions. The case also may impact other areas where plaintiffs argue that an arbitration agreement conflicts with some other federal statutory right.
Caifornia Public Employees Retirement Sys. v. ANZ Secs., Inc., No. 16-373 (SCOTUSblog page) involves whether, under the class action tolling rule of American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), the filing of a putative class action satisfies the three-year time limitation (statute of repose) in Section 13 of the Securities Act with respect to the claims of putative class members. This case may address a broader question of whether American Pipe tolling applies to statutes of repose, or only to statutes of limitation. If the Court rules that American Pipe does not apply to statutes of repose, that may provide corporate defendants some protection against what can be lengthy periods of potential uncertain liability where putative class actions can take years to resolve.